Novel studies using inhibitors of the intracellular Ca2+-ATPase and intracellular Ca2+ chelators reveal that distinct intracellular Ca2+ compartments regulate early and late manifestations of keratinocyte maturation. Downstream from the Ca2+ signal, protein kinase C alpha, delta and epsilon appear to regulate keratinocyte gene expression during differentiation. In part, this occurs through upregulation and phosphorylation of Jun B, Jun D and Fra 2 to form an AP-1 complex that suppresses gene expression. In contrast p53 transcriptional activity increases in differentiating keratinocytes, and this is associated with both increases and decreases in p53 regulated gene expression. A number of studies indicate that tyrosine kinases contribute to the normal and neoplastic phenotype of keratinocytes. Tyrosine phosphorylation of protein kinase C in neoplastic keratinocytes is associated with resistance to terminal differentiation. This is mediated by activation of the epidermal growth factor (EGF) receptor but the proximal kinases appear to be members of the src family. The epidermis of mice null for the EGF receptor is growth suppressed, but hair follicle proliferation is relatively normal. In contrast, hair maturation and hair follicle orientation are abnormal, and this is associated with upregulation of alpha6beta4 and alpha3beta1 integrins. The interaction of mesenchymal and epithelial cells in skin morphogenesis reveals dermal components that induce collagenase release in epithelial cells and dermal components that release factors to cause a wrinkling phenotype in the epidermis. A focus on the regulation of differentiation in keratinocytes indicates that tyrosine kinase inhibitors have a profound influence on differentiation of normal and neoplastic cells. Staurosporine induces a complete maturation program in both normal and neoplastic keratinocytes through activation of protein kinase C alpha and delta. Methyl 2,5-dehydroxycinnamate causes protein cross-linking and directly kills normal and neoplastic keratinocytes. These agents are currently being tested for anticancer activity in vivo.